Question

Which of the following are objections that a court may have to a discharge of the debtor's obligations?

1) Failure to keep adequate books and records
2) Fraudulent transfer of property
3) Failure to disclose assets
4) Failure to attend court hearings
5) Failure to pay filing fees

Answer 1

A court may object to discharging a debtor's obligations due to failure to keep records, fraudulent transfers, undisclosed assets, missed court hearings, or unpaid filing fees. For bank balance sheets, assets include not just cash but also reserves, loans, and bonds. In loan acquisitions, their value may increase or decrease based on the borrower's payment history and changes in interest rates.

Step-by-step explanation:

The objections that a court may have to the discharge of a debtor's obligations include:

1. Failure to keep adequate books and records, which can prevent the court from assessing the debtor's financial situation accurately.
2. Fraudulent transfer of property can be seen as an attempt to hide assets that should be part of the bankruptcy estate.
3. Failure to disclose assets is another issue that can prevent the fair distribution of assets to creditors and may indicate the debtor is trying to retain more than they are entitled to under bankruptcy laws.
4. Failure to attend court hearings, as this can be viewed as a lack of cooperation with the bankruptcy process.
5. Failure to pay filing fees, without which a case cannot be properly processed.

Regarding bank balance sheets, the money listed as assets may not actually be physically present in the bank because these also include reserves held at the Federal Reserve Bank, loans to customers, and bonds. The assets account for money that is being circulated and managed rather than just the cash on hand.

In buying loans in the secondary market, the value you place on a loan can vary greatly:

• If a borrower has been late on loan payments, you'd likely pay less, as there's higher risk involved.
• Should interest rates rise, existing loans with lower rates might seem less attractive, and you'd pay less.
• If a borrower, particularly a firm, has declared high profits, you could be willing to pay more as their repayment likelihood is better.
• If overall interest rates have fallen, existing loans may be more valuable, and you'd be willing to pay more.

Several methods can help reassure a bank when dealing with a loan applicant. These can include presenting a strong credit history, offering collateral, having a co-signer, showing stable income, and proposing a larger down payment.